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Sunday, 31 January 2010

I'm going to talk about systems. We tend to use this term so casually that we forget that it really requires a big change in the way we think. What do I mean? well, let's start from the beginning and use an example of a community.

You move into a village and you really like it. On weekends, people go to the village green, have picnics, everyone knows everyone else and they welcome you as a local. Someone knocks on your door and tells you that your headlights are on, and they invite you to a party at the village hall. You think, wow, this is really nice and you become part of the village, the unwritten 'norms', the friendliness, the sense of ownership and responsibility to your neighbours and other villagers.

The village becomes popular and more houses get built. Pretty soon, 8000 people become 10,000 and then 30,000 and in a short span of 10 years, you suddenly feel the village has lost its community feeling. There's graffiti on the walls, no one smiles much anymore and there are hardly any village get togethers. What happened? was it because there is more antisocial behavior from the young? is it because of the size? it's easy to say 'well, we went from 8000 to 30000, that's what happened' but that's not a reason. what is it that held a community together at 8000 that cannot hold at 20,000? what if you had to design a village, a city and a community? how would you do it?

Community, is a typical example of an emergent property. The scary bit about emergent properties is that its the property of the whole, and only exists as a whole, not a property of the component bits. you can throw people, pond, playground, houses, village hall, shops and schools together but that does not make a community. community is about the interactions between the components. In other words, its not about people and playground and houses and shops but the word and in between those words.

Health is an emergent property too. It's about our diet, our fitness, our genes, our lifestyle, all interacting with one another. How do you design health? or community? the scientific thinking we've been taught is so component based that i can bet you're thinking... ok... let's see what components go into that system and design it accordingly. er... no...emergent properties cannot be deterministically designed (it's 'emergent'?)That's the problem.

System thinking is not intuitive. Our scientific education have taught us to be reductionist in that the division of a complex problem into separate components is acceptable and that the elements of the whole are the same when examined independently of the whole as when they are examined as a whole. Think about the way we go through our lives - the whole 'plug and play' mentality has made us troubleshoot systems by taking out bits at a time, look at it, change it, fit it back and expect things to work. This is fine if the linkages between the components are weak but disastrous if the linkages are more important than the components - the case of a community.

Systems thinking is important in understanding VALUE and OUTCOMES because it radically changes the way we think and we really have to start thinking in this way. The world we are currently operating in is becoming more complex, where components cannot be analysed on its own, but within their ‘whole’, as the interactions between components are key to achieving system level outcomes. Our world is evolving towards complex systems where offerings are interconnected. The nature of the interdependencies are accelerated by technologies moving towards convergence resulting in the involvement of multiple stakeholders and multiple customers all contributing resources into the system and paying for different facets of the system and deriving different benefits. Emergent properties such as community, health etc. are starting to be key outcomes to society and yet because the design is not one of cause-and-effect, is not one of modularity (plug and play), we need to think differently. During the industrial era, outcomes were achieved with inventions such as steam engine (transportation), TV (entertainment) and these are designed and produced in a reductionistic, component-driven way. Our future in the modern economy wants critical systems-based outcomes such as community, sustainability, health and yet the knowledge to achieve such outcomes is still so lacking.

A final word about emergent properties. If you don't know what caused the emergence, they can be very fragile. Sometimes the wrong interventions disrupt the entire property. i like to use newscorp's monetization of myspace (see economist article here) as how their intervention is destroying the myspace community. The economist attributes it to the neglect of technology. my opinion is that it goes much deeper than that. the emergent property of community in myspace was a result of interactions between users. myspace just never knew how the outcome was achieved and what resulted in that emergence. They now run the risk of ruining that property for good (i happen to know a little about newscorp and I gather that they really want to develop their own content for the community, rather than have the community develop the content. good luck). And I dont buy the 'ubiquity first, revenues later' argument either for developing online communities. The community can go down at 6m, 60m or 600 million if the interventions are wrong.

Online communities give the illusion that we have data for all the interactions - online right? so we can get loads of data, the kind of data we couldn't get from a village community. right? maybe..... but the science and thinking is still the same. systems thinking is to think about interactions and emergent properties (and from the design angle, its about interventions and feedback (see comments in my blog post below on nokia and value). Quite different from component-based design that we're used to.

Tuesday, 26 January 2010

I am finally going to post the reason why this blog is called value-based service systems but I have a few final words on value co-creation.

To reiterate, the concept of value co-creation surround the idea that firms do not really provide value, but merely value propositions and it is the customer that determines value and co-creates it with the firm at a given time and context best for the customer achieve the outcomes they want. So a firm’s product offering, whether they are goods or activities, are merely value unrealized i.e. a ‘store of potential value’, until the customer realizes it through co-creation and gains the benefit. As I mentioned previously VCC implies customer resources to realize the value become central towards achieving end benefits.

We are seeing value co-creation gaining a more prominent role with healthcare (with greater customer empowerment), with mobile telecommunication and the internet (with user generated content), education (with self study courses). That is the world we're going towards. Customer resources as central to value, benefits and outcomes.

Actually, I like to flip it around. Think about yourself as a 'firm'. You would ordinarily do everything yourself but that would be hugely inefficient and impossible. So you would 'outsource' certain aspects. Take an extreme view - you could drink water from a tap but that is not effective so you buy a cup to hold the water to drink it. You have just outsourced that function to a cup. So all goods and services are offerings to make your life better, more effective and improve your quality of life. I like to say this to the NHS - 'your service is an interruption to my quality of life. How are you interrupting me today?' - it gives an 'outside-in' perspective and if you read some of the VCC literature (Payne, Gummesson, Prahalad), they talk about the need to balance out the system to understand VCC better - Evert Gummesson calls it 'balanced centricity'. (By the way, for UK people, Evert is coming to Cambridge and London on 11/12 Mar so let me know if you'd like to attend his seminar.)

So if you think about the customer as a 'firm', you will understand VCC as a partnership with shared resources. Steve Vargo has a real nice paper out on 'It's all B2B...' forthcoming in the industrial marketing management. Really a good read. So as a 'customer/firm', what are our resources? There is currency in our time, our ‘eyeballs’, our effort, our loyalty and all type of resources accessible only to us which we can trade off with money (price) and firm’s propositions - all to co-create value. But do we know how to measure this VCC? or price it?

The answer, I think, means we need to extend the logic a little further coz most of us who come from the cause-and-effect world, the Porterian 'value chain' world, don't necessarily look at the right unit of analysis to find the answer.

It's nice to think of the firm and the customer in partnership, sharing resources, co-creating value and then think of the price the firm can charge for the service (that includes customer resources) and then try to compute customer long term VCC-informed value, VCC-informed customer equity and the like. It's nice to think of it like that because we can see the cause, and the effect, and it makes it all nice and neat.

The truth, like life, usually gets a little bit more complicated.

In today's world of outsourcing, firms' value propositions can sometimes be a network of propositional value e.g. server farms from Amazon, social media from facebook, search engine from google, all work together in one click, or on one web page. On top of this, content can sometimes be from other customers, so consumption (and the realisation of value-in-use) is derived from multiple customers consuming and providing value propositions with the firms. This is starting to get really murky.... and it's not just online either - whether you're talking about an airport, transportation, olympics, value is being co-created in systems now, by multiple stakeholders - customers, suppliers, firms. In such systems, it’s hard to tell who’s the provider and who’s the customer. Also, who pays whom for what is also unclear. The future resides in a service system of resources proposed, consumed and value co-created by a web of stakeholders, including customers themselves, all of whom have something to gain and something to give to the system.

What is cause, and what is effect? And when you really can't tell cause from effect, what technologies should we use? As a social scientist, an economist, a consultant, this problem intrigues me. Yes, and this is the reason why this blog is called value-based service systems. The interplay between processes and outcomes within a service system which are non-linear and multi-directional in nature suggests that our current instruments of analysis may not be as effective. Miller and Page (2007) calls it, “understand running water by catching it in a bucket”. The future will see the development of more dynamic system level tools, with the system as a unit of analysis in measuring value co-creation, stakeholder (including customer) equity... think about how this could work for hybrid public-private sector collaboration.. which of course leads to ..........ta-da! my NHS project starting this April.

Sunday, 24 January 2010

So finally I come to the subject most talked about in contemporary discussions on value. Value Co-creation.

Here's the way I teach it to the MBAs. I ask them to go to a cafe and with 'new eyes' (ala Kuhn), evaluate the experience by critically looking at all the attributes (features) of the cafe. They go out, have nice coffee/tea, come back after 45 minutes, notebooks in hand. So I go on the white board and on the right hand side I ask them to give me the outcome of the experience (value). I wanted the emotional and functional outcomes so they will say 'relaxed', 'feel good', 'got updated on the gossip', 'chilled', 'cosy and warm'. Then on the left hand side of the board, I ask them to give me a list of all the attributes of the cafe. This part is easy. they usually say 'music', 'ambience', 'good coffee', 'not crowded', 'good seats', 'good heating'. Between the attributes and the outcomes, I create a blank column and I ask them a simple question - how the hell did 'ambience' become 'chilled'? how did 'music' become 'relaxed'? They usually look puzzled, and not understand. Until I say - 'what if you can't hear'? would 'music' still lead to 'relax'? what if you are there to sort out a problem with a girlfriend, would 'ambience' still lead to 'chilled'?

They suddenly realise that they have completely forgotten their own role in creating that experience. That they, as customers, co-created the value with the cafe. They realise that for attributes to become outcomes, they realise the value proposition of the cafe to achieve benefits. And more importantly, and this is a key point - they needed to access their own resources to co-create that value whether these resources are their ability to choose the right company to go to the cafe, or even their basic resource of being able to see, hear and feel. The customerdesignedthemselves and their context so that they can co-create value with the firm.

It's fun to watch the penny drop. The looks on their faces are priceless. I honestly believe I teach for that moment. But being smart MBA students... they get it and when they do get it, they fill up that middle column with lots of very interesting things about themselves and their resources to get the left hand side attributes over to the right hand side outcomes. Makes me cheer...

Back to the previous point. In essence, it's a lot about whether the customer is able to access the resource to achieve the best benefit and whether the firm takes for granted what the customer is able to access. BMW i-drive. Have you tried it? In its early days, you could sit inside the state-of-the-art BMW and feel really stupid because you don't know how to work it (they've tried to make it easier but I haven't tried it recently). In my world, you just didn't have the right resources to co-create value. So the best value proposition in the world (iPhone) is useless if you didn't know how to use it. And it would give you the greatest value if you did. What does this mean for firms? Well, to service designers out there - how much of service design includes the design of the customer and the resources they need to co-create value? And to achieve what types of outcomes?

Oh, just to clarify. Value co-creation isn't co-production. Co-production is helping the firm shape its value proposition (users helping nokia with the next phone, or better software, or even a better cafe). Value co-creation is bringing in your own contextual resource to achieve the beneficial outcomes with the firm at the point of consumption/experience (remember, we are still talking about value-in-use?) There is a difference.

So pop quiz... how does one co-create emotional value? what resources are needed by the customer? and what's the value proposition of the firm? what fun...

Friday, 22 January 2010

It's amazing how people just LOVE to label people, things, and box them up to neat little packages and expect everyone to fall nicely into place. So Gen NEXT are the younger ones, vs GEN X, the thirty somethings vs baby boomers.. but what do they MEAN? What do these labels say about what they value in the services and goods they purchase and consume?

If a firm has to design for value, it has to design for the segment of customers they want to target, and you would need to know what is the value upheld by the target segment. The cardinal rule of marketing 'you can't sell to everyone' still hold true today.

Segmentation in Marketing is as old as segments exists. In the old days - everyone stayed in their boxes (or so we are led to believe). If you stayed in a certain location, it said something about you, which class of society you are, which brand of cereal, juice or clothing you'd buy. Segments neatly fell into nice demographics, income and social classes. And by inference, marketers knew what each segment would value from a good or service and the firm could design and deliver accordingly.

Of course that is no longer true... today, it's really hard to box people up. This then leads to how hard it is to cut the market up into segments for firms to target. How should markets be segmented? Marketing has leaned towards behavioral segmentation, which is close to value segmentation but the focus is still on purchase segmentation vs consumption segmentation. In the mobile phone world, most firms have given up on traditional segmentation and now segment on value-in-use e.g. phone users are 'Life Jugglers', 'Technology Leaders' or 'Simplicity Seekers' (see Economist article)

If you want to think about how mixed up segments can be, just take me, for example. I declare my age, where I live and what I do for a living to Yahoo and for fun, I turn on Yahoo radio to see if they 'get' me. They run ads on kitchen towels and toilet paper. My facebook ads are about weight loss (maybe they should ask me my weight), skin care and credit ratings. Such is the extent of their sophisticated data mining software.

To be honest, I'm pretty hard to box up. I've got 3 kids and my eldest is in university. But I'm much more into social media than my girls. I use linkedin, twitter and facebook (facebook is all personal with very defined privacy settings), and I play MMORPG/PvP, with a level 42 defender. I'm glued to my iPhone and my laptop. Yes, I'm a geek. Worse, I'm a geek mom/gal of the bossy variety. But I also play golf to a handicap of 25, drive a BMW 318, own a house, am a consultant and an academic. On top of that, I cook for the family. Maybe the kitchen towels and toilet paper isn't far off the mark after all.

And if life cannot get more complicated, let's talk about expected and perceived value.

I use the example of buying mobile phones... don't you just love it when they ask you if you want 500 minutes and 500 texts or 1000 minutes, 100 texts etc. etc. etc. when you buy mobile phone packages..? Yes, OF COURSE I know how many I need. I know for certain I texted 236 times last month and can foresee needing to go up to 268 texts next month..! And why dont you ask me when I need to text as well? mmm... let's see... 215pm, 340p, 5pm and only on tuesdays and thursdays....

Get real... If I truly can predict this, I might as well predict the lottery. What I pay for is really the availability of use. The idea that IF I need it, it's available because NOT being available is a terrible thought and being availability at a more expensive rate is a slightly less terrible thought. Human beings seek to minimize costs (and maximize net value i.e. benefit minus costs) even if the benefit is in the future. So when we decide to BUY, ie. at point of contract, we weigh the EXPECTED VALUE in the future and decide how much to pay NOW. When we actually consume the service, we develop a PERCEPTION of the value and we compare that to what we expected when we purchased. And then evaluate if we want to renew the contract. Could there be a more efficient way of doing this? Of course! Mobile phone companies are hopelessly inept at designing contract mechanisms for information revelation. It's pay-as-you-go (prepaid) or contract (pay monthly)....there are so many ways they could increase revenue if they knew better how to incentivise segments to reveal their use patterns - in mathematical terms, we are no where near the pareto boundaries for the most efficient contract. Want to know what is a good pareto optimal pricing design? look at the oyster card and learn.....or read my book.

Wednesday, 20 January 2010

While value is contextual and temporal, it is also multi-dimensional. Work by Hartmann (value theory), Haglund (who attempted to validate Harmann's work) and Mattsson (who brought the thinking into service research) is conceptually interesting although philosophically challenging. If you want to go further back (and get your brain tied in philosophical knots), GE Moore talks about the science of value. For me, who like to keep things simple, value has emotional, practical and logical dimensions (that's Jan Mattsson's words, not mine).

If you don't believe in emotional value, take a look at your watch. If it's worth anything more than £10, you bought it for emotional value because if you truly only bought it for functional reasons, you wouldn't have bought any watch above £10. So the ferrari that is sitting in my driveway (I wish) gives me great emotional (ownership, status) value even if I don't drive it. Practical value is an abstract concept that can be described as function. If you think of a chair, the practical value of a chair is the abstract notion of a seat. Conversely, there is nothing abstract about logicalvalue. Its value is defined and purposeful. If you want to buy a tape measure, it must be a correct tape measure i.e. the measurement on the tape measure must be accurate. If it's a hotel, you want it to have a bed, a bathroom, i.e. logical value is about objective standards.

What is interesting to me about these dimensions of value is not merely that they exist, but from an organization's perspective, many firms just do not design and deliver all dimensions of value to the customer. Often, they reduce it to some six-sigma of practical or logical value but to be truly able to deliver value to the customer, the organization must be able to deliver all dimensions of value, not merely one or two. This is hard, because design and delivery of services often do not design and deliver emotional value because the transformation required to deliver that value is the transformation of the customer itself. I discussed this in my recent paper (submitted to Management Science and to La Londe Service Conference). Question then: How should we design and deliver emotional value? We could, of course, go back to Marketing and talk about brands but marketing usually talks about creating the brand and do not usually talk about delivering on the brand promise....operations management? the ops chaps would run a mile...strategy? strategy organizes the firm, they don't get their hands dirty with delivery... have I made the case for transdisciplinarity yet? When you truly line value towards design, delivery and evaluation, you can really see where the gaps are...

Monday, 18 January 2010

Quite a lot of people have asked me about the concept of value. So I thought I'll pen down some of my thoughts. I'm actually in New York now helping my sister with her new baby and it's 9am, poor parents are exhausted and sleeping and I've got an infant sleeping on my chest as I type this on my iPhone. I mean, if you can't blog on your iPhone with a baby on your chest, what's an iPhone for right?

Back to value. I see the world in terms of value. Value drives everything we do. We buy stuff because we value them, we collaborate because there is value in the collaboration. We marry, have kids, do smart things and stupid things because at that point in time, we felt there was value in doing them. If you subscribe to the views of Richard Dawkins book (selfish gene), we even sympathize and empathize because we see value in them. I don't subscribe to it because I think it's internally inconsistent but that's another story.

There have been many scholars researching into value. Woodruff, Zeithaml, Payne, Haglund - a simple google scholar search will give you loads. What I hope to pen here is a condense version of many years of work in value. I have to stress, that I am not attempting to discuss value according to the meaning, interpretation and how it's constructed Internally - I leave it to the social constructionists and structuralists for that. Rather, I shall be crass and state that, as a business economist, I am interested in value the way it can be captured in an exchange, monetarily or otherwise. This does not mean I believe in value as exchange value. Value to me is always value-in-use. But I am interested in how use value translate to exchange value. There is a subtle, but important difference.

CONTEXTUAL AND TEMPORAL VALUEValue is contextual (state dependent) both in terms of when we consume it and when evaluate it (to buy). This means it depends on the state of the world at the point of use. I value the USE of this iPhone right now in this context because I would be bored to death lying here with baby on chest otherwise. Between 10 to 6 last night when i was asleep, I did not value the functional use of the iPhone but I valued it's AVAILABILITY for functional use, which is a use-value as well, but an emotional use. I know I'm tied to my phone. How sad is that.

But when I BOUGHT this phone, I might not have envisaged this particular context or all contexts where I would have valued the use of my phone. Indeed, the context in which I purchased my phone would have influenced the price i was willing to pay for it at that time. It also means that I have to imagine the future use value contexts to develop a present value of the phone. My book covers this in more detail and the latest Journal of product and brand management paper where i modelled advanced demand goes into more theoretical and mathematical detail on how firms price for such value.

Up next (baby stirring): Value has emotional, practical and logical dimensions; Value is perceived on use, expected on purchase and evaluated on recommendation or repurchase

Sunday, 17 January 2010

There are two major themes that are in line with my work - Value, and the interface between strategy, operations and marketing; and of course healthcare.

Essentially, the student would get a stipend of £13290 per annum and a waiver of the fees. It's a good opportunity to get into the service research space with a team of researchers in service system, service operations and service marketing. Andi and Rog are the editors of IJOPM and we have a huge interest in service systems research.

If there is interest to work with me, then please read the research section of my website at

Tuesday, 12 January 2010

Being a close follower of developments in UGC (User-generated Content), the notion of value in handsets seem to have evolved. Functional value (making calls, communication), social value (texting, status), emotional value (style, look-and-feel) and now the value from content generated by externalities - UGC. Delivering value that is evolving is clearly a challenge for Nokia. Where Apple stumbled into UGC quite by accident through the iphone (talk to people in O2 in UK - they can tell you how unexpected it was), Nokia is now having to design to that value. How do you design for a value that is clearly an emergent property of a complex system of user interactions? a complex system, by its nature, is complex because the property exhibited by its components (the parts) is not the same as the property exhibited by the system (the whole). Can emergent property be deterministically designed? Is that not a contradiction?

The only way I see a system can be controlled is through interventions. The focus on Nokia should be to design the interventions, rather than trying to design the components. Yet, I see their focus is still on components - the perennial myth that if I get the components right and stick them together, the system would function beautifully. Sorry, Nokia, you would get Terminal 5. Focus on the right unit of analysis. It's the system, s*****!

Friday, 8 January 2010

In my conversations with Addenbrookes Hospital, I mentioned that I would like to pull together a team so I've been busy the last few weeks assembling the team.

Team building is one of the things I've been doing these past few years. It's quite an art I realise because unlike corporate life, you don't just hire people with the right skill sets. Team members are basically those who are enthusiastic about the research and they could be potential PhD students, consultants, practitioners, academics, postdocs and many of them may not be directly funded by the project. Also, there could be institutions interested in this research as well so pooling resources is key to team building and one has to be rather enterprising to pull like minded stakeholders (and to know where pots of money are located) to construct a good team.

So... once I get a project, I think about who else might benefit from this - which company, institution? if they contributed funds to complement this project, could it fund a postdoc/phd student/fellowship? What would they get in return? What are their expectations? Can we meet their needs and get the funding to fund a bigger team and create opportunities for new researchers? Pooling the funding can create marginally higher resources than the cost to deliver everyone's expectations (yes, that's me thinking like an economist). So if I got money from ESRC, I will try to get money from a company, the school, anyone who could potentially benefit from the knowledge.

Then there are the individuals. Often i have people who email me or in my travels meet others who are interested to get involved in my research. Some are potential students who are smart, experienced but have no funding to do their PhD. Others want a change in career. There are usually a few criteria to be a team member of a project. First the individuals must get something back for themselves personally. That usually means data for a PhD, experience, learning from the research, opportunity to get access to good data for publication etc. Second, the individuals must give something to the project. That means they must have a skill that the project can use - a methodology, knows all the literature, has experience in the industry, has project mgt skills, is him/herself an expert in a complementary field etc. So bringing in the individual would mean a win win for the project and the individual. Third, of course, we must be able to get along. As the project gets long, the third point is really important. There must be trust between team members as mistakes and misunderstandings are bound to happen. Sometimes the difficult thing is to find the money. Sometimes it's to find the right individuals.

For this project, I've found 2 who are suited (they haven't joined me yet so I'm using initials till they do)

SS - new PhD student - S is a consultant, runs his own firm and crazy enough to pack up his family and move from Denver, Colorado to the UK to study with me. He has great enthusiasm for service research. He's expertise as a consultant and his conjoint methodological abilities would be useful for the project. I'm at the stage of finalising Sid's funding (a PhD student requires £23k funding per year and £69k in total to fund).

WM - postdoctoral researcher. WM and I have been discussing her doing her postdoc with me so this project would be ideal to sink her teeth into. She is postdoctoral and has written academic papers so she would be helpful in getting the literature together, helping me write the reports for the work. In the process, we hope to gather good data to publish in tier 1 journal, something that would greatly boost her career.

I'm in discussion with Addenbrookes and the Clinical school on visitorship status for both of them so that they can be based in Cambridge working with me.

I guess starting off with good news as one of the first blog entries is a good start for a blog.

So I received the letter today from the ESRC. It was a simple letter, deceptively obscuring the challenge the project entails but then only very few people knew how challenging this project would be. Most academics just take on these projects as a way to access data and milk it for all its worth. Me? I had to find an impossible problem to solve.

My interview was with Professor Patrick Sissons (the Regius Professor of Physic - the oldest chair in Cambridge - check this link), Professor Jones (forgot his first name) and Stephen Davies (Exec Director of CUHP). We chatted about the work, they were most puzzled about my 'researcher-at-large' status i.e. being full time employed by Exeter yet based in Cambridge for 3 years (it's a long story) but they were the 2 most inscrutable people I have ever met. I couldn't tell if they liked me or couldn't wait to see the back of me. Patrick chatted about Singapore - links with NUS are strong in Cambridge I gather.

Oh well, so I got it and on reflection, what did I get myself into? Well, the challenge is this - Cambridge University Health Partners (www.cuhp.org.uk) is a collaboration of University of Cambridge and NHS and the collaboration is funded by government. Each party has its objectives - for Cambridge University, it is research and education, for NHS it is patient care, new treatments and betterment of society. It is assumed that a collaboration such as this would of course be fruitful.

But how do you measure multi-stakeholder collaborations where the system has emerging outcomes and individual stakeholders have their individual outcomes? In short, what is the performance criteria for multiple-stakeholder, multiple-outcome systems? Here's an extract from the proposal:

In collaborating, stakeholders’ value propositions are realized by other stakeholders within a service system. This implies that the stakeholders that receive and realise value are just as much a part of the service system as the stakeholders that propose the value as both parties contribute the resources accessible to themselves into the system to achieve the outcomes. Yet, it is important to develop system-level measures to evaluate the overall performance of the system as well as to ascertain what should be the parameters for system performance. In short, where the ‘whole’ should be bigger than the sum of its parts, what should be in the ‘whole’, how should the ‘whole’ be measured and for what type of outcomes. This is important for stakeholders of the ‘whole’ such as government, who could fund the collaboration, or society, its beneficiary.

Impossible problem right? I have six months to solve it. Why do I do this?

Comments from research colleagues:

From Bob Lusch:I read over your proposal and it is quite ambitious and needed. In fact if you look over the attached PDF on a fortcoming essay for the Converse Awards (in honor of Len Berry) you will see I challenge Len and others to study the health care service ecosystem. Probably only the last half of the essay is of relevance...the first half comments on Len as a scholar...which was part of the aware ceremonies. In your research you need to pay more attention to resource integration and how this unfolds over time and the fact that it is not so much outcomes or performance but processes and performing. This makes the challenge even more difficult...but that is what you are used to. Think about it in terms of the individual...it is not how you have performed but how you are performing and this never stops or does reseource integration...which consists also of resistance removal...since use of a potential resource is often prevented by resistances. Also consider some of the ways to use digital technology and the electro magnetic spectrum to build in sense and respond capability; thus capturing processes and performing.

I like the focus on fuzzy set logic...you might have Steve send you some of his work on social judgement theory and latitudes...which have some nice ties to fuzzy math.

Keep up the good work it makes our work easier.

From Steve Vargo:I am not so much rolling my eyes as shaking my head --in amazement at what you find to tackle...and always seem to pull off well.

I think your stakeholder-alignment thesis, which came across so effectively in your performance contracting work, and seems to be at the core here also, has potential as a major breakthrough for research and practice. The "wicked" problem is of course in the assessment. I think Bob is correct that the critical focus is more on the resource integration (and dynamic context) than the resources (which only gain resourceness in given contexts) but I also agree with you that you have to identify some boundaries if you are going to create metrics to move beyond "perspective" and communicate on a common unit of analysis At some point however, the focus probably needs to return to the dynamic processes if the alignment notion is to be fully pursued. In the meantime, what you have proposed has the potential to make a major step.

Congratulations on your continuing great work and success. Keep it up and let us know any way we can assist.

I think Steve is politely calling me crazy. I do admit being a sucker for wicked problems and the access to great data would help the team and I publish in better journals....besides, if I can work with a bunch of engineers, I can surely work with medical researchers...... right? no, don't answer that.

About Me

Irene Ng is a Professor of Marketing and Service Systems and the Director of the International Institute for Product and Service Innovation at WMG, University of Warwick, . She is also a Senior Member at Wolfson College, University of Cambridge.

Irene studied physics, applied physics and computer programming as an undergraduate and became an entrepreneur and practitioner for 16 years before switching to an academic career. During her time in industry she occupied a number of senior positions in industry rising to become CEO of SA Tours and Travel group of companies (Singapore, Malaysia, China and UK) and founded Empress Cruise Lines, a company with an annual turnover of USD250m which she sold in 1996.

A business (IO) economist through her doctoral training, Irene’s research lies in the trans-disciplinary understanding of value; creating, designing, pricing, contracting and innovating based on value, as well as new economic/business models and value co-creation in complex service systems. She has published in numerous international journals in the domain of engineering, management, marketing, information systems, economics, education and sociology and she is the author of the book The Pricing & Revenue Management of Services: A Strategic Approach and lead editor of the edited book Complex Engineering Service Systems: Concepts and Research. Her third book 'Value and Worth: Creating New Markets in the Digital Economy' is now available on Amazon Kindle (http://valueandworthbook.com) with printed rights acquired by Cambridge University Press (out at bookstores March 2014)

Irene is one of the 6 UK Advanced Institute of Management (AIM) research Services Fellow and also the ESRC/NIHR Placement Fellow.

Both an entrepreneur and an academic, Irene is passionate about the link between practice and research. She is an advisor to startups on new pricing and revenue models in digital businesses.